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Hi everyone and welcome to the Yellow Tunnel community, a family of trading services dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
Time sure does fly. We've reached the halfway point of Q3 which is sometimes hard to believe. Kids are heading back to school and while the weather remains nice, fall is right around the corner. This week, we saw the release of the latest Federal Open Market Committee meeting minutes, July retail data, and a handful of marquee retail earning releases.
At home, we rang in the final round of family celebrations and events. As I stated last week, the early to mid-August time range is one that is always active in my household. With two birthdays and a wedding anniversary, our weekends are spent hosting or visiting family. This weekend, we celebrated my son's 6th birthday at home with an outdoor movie experience.
We rented out a big, inflatable theater screen and set up a projector with a movie of our son's choosing. Several of his friends came over and brought chairs, bean bags, snacks, and cushions. Everyone got comfy on the lawn and settled into Sonic the Hedgehog 2. The kids loved it, the neighbors were bewildered, and I wondered what exactly I missed in Sonic the Hedgehog 1.
The following day, it was time to celebrate my wife's birthday and as I said last week, due to the close nature of all three events, I always want to make sure I do something special just for her.
This year, we headed downtown. We rented a hotel for the night in Chicago's meatpacking district. The area, similar to that of New York's, is filled with high-end and notable eateries. With plenty of restaurants to choose from within walking distance, as well as an extraordinary selection of restaurants right in our hotel, we had a lovely stay.
Beyond the food, our hotel, The Hoxton, had plenty of modern amenities to enjoy. Restaurants on the first and top floors, as well rooftop bars, pools, and a 24/7 DJ. The location we stayed at was lively into the late hours of the night, or technically early morning. In contrast with our Sonic the Hedgehog night, this was a totally different speed. And while I enjoyed my time, I realized I am getting older and there is a big price to pay the next morning staying out into the wee hours of the night.
Returning from the city, I was happy to have early nights with the family at home and falling back into my routine. Sometimes that's all you need for a good reset or recharge when your routine gets stale or you overexert yourself with a busy schedule. One other thing I was excited to return to, having fresh energy, was my trading routine.
On Monday, stocks opened low only to rebound impressively, extending the Dow's longest unbeaten run since late May. At the midweek, indices sold off but found some support following the Federal Open Market Committee minutes release.
In the minutes, policymakers were open to continuing interest rate hikes but will be conscious about not going overboard. Similarly, the Fed said that if the public began to doubt the Fed’s resolve to raise rates enough to control inflation, then there would be a significant risk of high inflation becoming entrenched.
Also this week, we saw retail data released, showing U.S. retail sales remained steady last month. However, the drop in gas prices and new vehicle purchases significantly impacted these numbers. Estimates were in the range of 0.1% growth, but primarily saw a drop in auto as retail sales minus auto showed a 0.4% increase, and up 0.7% if gas was also excluded.
Sometimes it can be hard to keep up with all the releases and reports, as well as changing volatility, which is exactly what I did during my latest Strategy Roundtable, which takes place weekly on YellowTunnel.
Trying to keep up with the market by yourself can be overwhelming. That is why I encourage you to join a trading community where you may interact and analyze with others. I recommend checking out our latest Roundtable webinar in its entirety below:
How To Trade a Bear Market Strategy Roundtable
With the unpredictable nature of the market and the uncertainty ahead of us, I can’t emphasize enough how vital it is for our readers and members of the Yellow Tunnel community to keep referring to our Live Trading Room so as to maintain a close tie of how our I and my AI platform is navigating us in and out of select trades. It’s FREE and I highly encourage everyone to sign up to the Live Trading Room and keep checking in throughout the trading day.
Every Monday and Wednesday, I highlight our best strategies and potential trading setups via the DISCORD server. It’s the future of bringing together a trading community’s total services, educational products, live chat venues, support, news, how-to tutorials, webinars, live-trading demonstrations, and tons of market analysis. It is incredibly interactive and full of crucial and timely information. Just go to:
I also want to emphasize to traders how vital a stop-loss discipline is to winning and being successful in an unforgiving market. We employ specific stop-loss instructions with every trade. The buy and sell programs controlled by high-frequency related algorithms can create great profits or cause sudden losses, so it is imperative to maintain an element of controlling risk with each trade.
CURRENT TRADING LANDSCAPE
To close the week, U.S. indices sold off as volatility ticked up. On Friday, $2 trillion worth of stock and index options and comments from Federal Reserve officials came to an end. The market continues to process the latest comments from the Fed while economic reporting significantly slows down. While the Fed sent some mixed messages, rates will most likely continue to be adjusted this year.
Interest-rate-sensitive tech stocks are likely to be the most impacted, with the Nasdaq leading the way lower. After posting a fourth consecutive weekly gain last week, the tech-heavy index is headed for a 0.6% drop this week. Treasuries moved higher to end the week as a result of the latest Fed news and could continue to climb.